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Documents Reveal How Sheldon Silver Made Millions from Obscure Legal Jobs
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Sheldon Silver is accused of using his position to make millions of dollars.

Summary: Sheldon Silver ran two fraudulent legal schemes to accumulate millions of dollars.

On Thursday, a criminal complaint was filed against Sheldon Silver, the leader of the New York State Assembly, the New York Times reports. Apparently, Silver made millions of dollars off of asbestos lawsuits and property-tax reductions, and took advantage of his powerful position in Albany, where lobbyists and special interest groups plead to be heard by lawmakers.

  
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Apparently, Silver made around $700,000 from bribes and kickbacks, persuading business developers to use a real estate law firm run by a former aide of his. In addition, he steered $500,000 in state money to an asbestos physician, who sent them to the firm Weitz & Luxenberg. Weitz & Luxenberg then paid Silver millions for his referrals and “legal work.” According to CNN, Silver could be sentenced up to 100 years in prison.

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Federal prosecutors sent a subpoena to learn how Silver supposedly earned his big bucks. They expected mountains of documents in return, but instead, they received just a single file.

The file did show that Silver had assisted a legislative employee with a private property dispute. Silver was not paid for this task.

Preet Bharara, the United States attorney for the Southern Distrit of New York, said that other than the property dispute, Silver “never did any actual legal work. He simply sat back and collected millions of dollars by cashing in on his public office and his political influence.”

To facilitate his scheme, Silver had several bank accounts. To hide his true earnings, he used his office in the State Capital to create side agreements that concealed his true actions.

Governor Andrew M. Cuomo appointed an anti-corruption panel in July 2013. When the panel began to question Silver’s income, Silver fought against the commission, arguing it was not their place to do so. While fighting the commission, taxpayer-funded attorneys argued for him in court. Silver represented the fight as a constitutional one, not a desperate attempt at self-preservation.

Eventually, Silver and Cuomo agreed to have the panel dismissed. Silver would not get off so easily, however: the dissolution of the panel only inspired Bharara to dig deeper, and he launched an investigation into Silver’s earnings.

Read about the investigation here.

Silver was elected to the Assembly in 1976. He was elected as speaker by fellow Democrats in 1994, a position known to be one of the most challenging in New York politics. On his most recent financial disclosure, reported in 2013, he listed around $650,000 in outside income from practicing law. He said his clients were “plain, ordinary simple people,” and that he often represented them in federal court.

However, after Silver’s arrest Thursday, Bharara said that just the opposite was true. The complaint explains that Silver was running two parallel schemes to take advantage of his position.

One such scheme involved real estate, which is a major industry in New York City. Albany both regulates and rewards this industry. It gives tax breaks and subsidies while enforcing rent control laws. Therefore, developers and lobbyists fork over millions to politicians such as Silver, as well as to committees such as the Assembly Democratic campaign—which Silver oversees. Clearly, Silver has a great deal of control in New York politics. In fact, in 2000, the Buffalo News reported that Silver had too much power, Wikipedia notes.

Silver set up an arrangement with an attorney who previously worked for him in the Assembly. That attorney, Jay Arthur Goldberg, is identified in the criminal complaint as an unnamed co-conspirator. Goldberg operates a two-person law firm in Manhattan that focuses on challenging property-tax assessments. The firm is paid on a contingency fee basis and earns up to 25 cents for each dollar that is saved in taxes.

The governor of Oregon has hired an attorney to respond to possible corruption allegations.

Silver has no experience in this area of law. Silver sent two developers to Goldberg’s practice, and in return he was sent a cut of the fees that were generated.

The developers are not named in the complaint, but many report that Glenwood Management is one of them. It is a beneficiary of state subsidies, as well as one of New York’s biggest political donors. Silver received a quarter of the fees Goldberg’s firm received from Glenwood, and 15 percent from the second developer.

This resulted in a windfall for Goldberg’s firm. Silver earned $700,000 from his referrals. Apparently, Silver disclosed the fee-sharing deal to Glenwood in 2012. Glenwood at first hesitated to sign a document that would memorialize the agreement. Later, Silver and a lobbyist for Glenwood codified the agreement in a side letter. However, Glenwood’s retainer document would not mention Silver.

The second scheme also involves referral fees: Silver allegedly earned $3.9 million for asbestos cases he sent to Weitz & Luxenberg, where he has worked since 2002. Silver directed $500,000 in state funds to a doctor, who then sent cases to the firm. The doctor is Robert N. Taub, who serves as director of the Columbia University Mesothelioma Center.

Virginia’s former governor and his wife were found guilty of corruption in September.

In fact, Silver persuaded the Legislature to issue a resolution that honored Dr. Taub. In addition, he helped the doctor’s son, Jonathan, find a job at a social services group that received state funding with Silver’s assistance.

That group, the Brooklyn-based OHEL Children’s Home and Family Services, released a statement confirming that Jonathan Taub was hired in 2012, and that it had “cooperated fully” with prosecutors and was assured it was “not under investigation and did nothing wrong.”

Dr. Taub has entered into a nonprosecution agreement for cooperating in the investigation against Silver.

Further, Silver sent $25,000 in state funding in 2008 to Shalom Task Force, a nonprofit that focuses on healthy marriages. Dr. Taub’s wife, Susan, sits on the board of that organization.

Bharara commented, “At the end of the day, all told, we allege that Sheldon Silver effectively converted $500,000 in public money into over $3 million in personal riches, which is a nice profit on being a public official. Politicians are supposed to be on the people’s payroll, not on secret retainer to wealthy special interests they do favors for.”

Source: New York Times

Photo credit: NY Post



 

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